Tupras Petrol Rafinerileri AS, Turkey’s sole refiner, said net income plunged 47 percent in the second quarter, missing estimates, as Iran oil sanctions shrank its refining margins.
Net income fell to 135.7 million liras ($75.4 million) from 258.1 million liras in the second quarter of last year, the oil refiner, owned by Koc Holding AS, said today in a filing to the Istanbul Stock Exchange. That missed the average estimate of 142.4 million liras from 17 analysts surveyed by Bloomberg.
Tupras cut oil purchases from Iran in the second quarter as the U.S. and Europe planned sanctions against the Persian Gulf country. Turkey pledged in March to reduce Iranian oil imports by 20 percent, earning a place among seven countries exempted from the U.S. sanctions for renewable six-month period.
“Refineries’ production costs have increased because of Iranian sanctions,” Tupras said in an e-mailed statement. Inventories lost value as oil and product prices fell, while rising natural gas boosted production costs, which also contributed to narrower refining margins, the company said.
The shares fell 0.3 percent to 40.7 liras at 3:19 p.m. in Istanbul trade.
Tupras said Aug. 14 that its net refining margin fell to $3.65 a barrel compared with a second-quarter Mediterranean regional benchmark of $5.73 a barrel and from $4.34 in the same period last year. Production fell 0.6 percent in the first half of this year, the company said at the time.
Sales rose to 11.9 billion liras from 10.2 billion liras a year earlier, according to today’s statement.
Tupras aims to make products with a low sulfur content such as diesel and gasoline from higher-content products such as fuel-oil through a so-called residuum upgrade project. Tupras spent $584.5 million on the project in the first half of this year, carrying out about a quarter of the $2.4 billion project, which is scheduled for completion by 2014, it said.
Tupras is cutting oil purchases 20 percent from Iran, after signing a contract in August 2011 to buy 9 million metric tons, or 180,000 barrels a day, of crude for a year. Iran’s share of Turkish crude oil imports dropped to 37 percent in June from 50 percent in May and 66 percent in April, according to data from Turkey’s energy market regulator. Turkey imported 1.87 million tons of crude from all nations in June, it said.